Historically companies outsourced business processes to save money or gain process efficiency. But as service provider offerings and buyers matured, BPO can now become a revenue enabler, according to Manish Dugar, senior vice president, BPO.

In some cases, old, outdated technology and antiquated processes in the back office can “handcuff” the front office, points out Dugar. For example, today enterprises need real time analysis, not end-of-the quarter reporting. But this kind of research and analysis is not possible without the newest technology.

BPO becomes an enabler if the service provider:

1. Can control the process from end-to-end
2. Has deep industry domain knowledge, including keeping up with ever-changing government regulations
3. Has developed the requisite IT to enable the process changes

Examples of BPO as a revenue enabler

Expanding into new geographies. Dugar cites a bank that may have become well-known in its home geography. Now it wants to expand but doesn’t have the processes or the local knowledge necessary. Wipro, however, has other clients in the proposed new geography and is intimately familiar with the banking regulations there. “We can provide a ready-made platform to support this bank’s expansion into the new geography because we have done it before,” explains Dugar.

Expanding into new areas of business. Stock traders are another example. Service providers with the proper technology and understanding of markets can enable traders to enter new markets and do different kinds of transactions they couldn’t do before.

Launching new products. Today’s service providers can also cut the time for a new product launch, Dugar continues. “If you open up a new market five months earlier than planned, it creates a business opportunity,” says the Wipro SVP. “It’s possible the opportunity could vanish if you waited.”

Keeping current customers. Social media is particularly helpful here. Say a manufacturer discovers it has a problem with its new printer. It can employ social media to let its customers know they can call a toll-free number to swap out their misbehaving printer with a new one. “This way the customer doesn’t have to call and complain,” he says. Nipping the problem in the bud creates good will and ultimately retains a hard-earned customer.

Using analytics as a revenue generator

Analysis is more important than ever, given today’s economy. “ We believe that analytics-driven experimentation and performance improvement will be a key driver for businesses to be future-ready. It’s hard to find trends manually,” points out Dugar. “Technology can point out trends that the naked eye can’t see.” Spotting these trends early is critical because then companies can make business decisions “based on the trends currently shaping the market.”

The Wipro executive recalls one client asking the service provider to help increase its cross selling and up selling opportunities. The Wipro team decided the best way to do this was to figure up which customers were the most likely to be amenable to a selling opportunity. Combing through the data, the Wipro team discovered that six percent of this company’s customers called, emailed or tweeted about issues they had with the company’s product. It removed their names from the cross selling list, figuring it would be difficult to sell more products to unhappy customers. Then they used the statistics to prioritize the remaining 94 percent. “These insights created a revenue opportunity for the company,” Dugar says.

In another case, the Wipro buyer sold surface cleaners (equipment to power wash buildings and windows.) An analysis showed the average surface cleaner purchase was $150,000. But the Wipro buyer’s average sale was just $100,000. Knowing this, the company’s sales force worked to bring up their sale to the industry average. “We helped them increase their wallet share with this knowledge,” Dugar says.

Why Now

A number of events coalesced to bring about BPO’s new role as a revenue enabler. Outsourcing buyers have matured. They have already picked the low-hanging fruits of process consolidation and improvement. They have already reengineered their processes and employed tools. Going through these evolutions generated the confidence buyers needed to get to the stage where they could feel comfortable outsourcing a process end-to-end.

One the supplier side, providers have gained vertical capabilities. “Collection for a telco is different from collection for a manufacturer. Each is unique,” says Dugar. Providers now have the experience and the expertise to understand the nuances of the industries they specialize in.

Service providers also have developed the technology needed to automate and transform BPO processes. They have analytics in place.

Put all three together and BPO steps up a notch. “Today, the service provider has to own the business outcomes using technology and analytics and thereby help its customers do business better,” says Dugar.

“I do think state and local government agencies are contracting with outsourcing providers at higher levels than we’ve seen before, for economic gains, to access to new skill sets and to stay on top of technological changes,” said Scott Belcher, president and CEO of The Intelligent Transportation Society of America.

Take tolling, for example. Initially, outsourcers were engaged to integrate front-end tolling technology and handle the back-end operations, ranging from violation processing to customer care. This solution evolved into an all-electronic tolling option, eliminating physical tollbooths by enabling toll tag or license plate information to be captured as the vehicles travel by at highway speeds.

“Now, we can give our clients the ability to set up high-occupancy traffic (HOT) lanes with dynamic pricing options. Agencies can raise or lower the price of the toll based on time of day or level of congestion,” explained Parker Williams, Vice president of Transportation Solutions for ACS, A Xerox Company. “Varying prices encourages commuters to take alternate routes, car pool or take public transportation. We’re managing traffic by changing driver behavior.”

According to Williams, higher-quality camera and character recognition technology is only part of the reason these new solutions are possible.

“Not only do we have new types of media available, but we’ve done a lot of work to automate processes within the infrastructure. Instead of someone looking at a license plate on a computer screen to match that plate with an owner, we’ve created software that can automatically extract and read the plates, pull ownership information from a database, and either bill that owner or deduct that toll from the owner’s account,” he said. “It’s a story of efficiency as well as creatively filling a need.”

Smart Cards for Fare Collection

While toll tags eliminate the need for cash collection on the roadways, contactless bank cards, either credit or debit, are bringing the same kind of efficiency to public transportation. Instead of a ticket, riders can use a contactless pay-enabled card or fob for any transit fare where the system is installed. The rider simply taps the card or device, boards the vehicle and goes on his or her way. The fare amount is charged to the credit card or deducted from the debit card.

In addition to speeding throughput and improving fare collections, these cards also give transit agencies something they didn’t have before: actionable customer data.

“Now, transit agencies can track when and how riders use their services, so they can make changes to better meet demand. They can add routes, change stops and get a clearer picture of their clientele,” Williams said. “The agencies gain insight while reducing costs, increase throughput and make it easier for their riders to pay.”

The Brilliance Behind “Smart” Parking

The innovation isn’t limited to roadways only. Smart parking is a huge growth area right now, because it benefits agencies, drivers and the environment alike.

“We spend 30 percent of our time driving around looking for a parking space,” Belcher said. “By guiding drivers to open parking spaces, smart parking increases safety and driver satisfaction while positively impacting the environment.”

Basically, smart parking places metal-detecting sensors in each parking space, which can identify whether a car is present or not. The sensors transmit “occupied or vacant” data to a central processing center that then transmits this information to cell phone applications, message signs or triggers a green light above the open space to alert drivers.

Drivers can pay parking costs with smart cards or credit cards, or, in the case of airport parking, payment can be tied back to that consumer’s toll account. Again, many agencies are relying on outsourcers to handle this integration.

The Impact of the “Connected” Generation

It would be impossible to talk about trends in transportation without exploring the impact of today’s connectivity tools.

“The whole smartphone-Internet-social media revolution is making its way into transportation and changing it, as it has so many other industries,” Belcher said. “Just look at how many cell phone apps have something to do with getting from one place to another.”

Drivers can get real-time traffic information, driving directions, or share congestion information with other travelers. Vehicle location systems let riders know when their bus or train will arrive. Travelers can go online to find shared rides, compare different forms of transportation, or find out where they can rent a Zipcar^® for an hour.

“The emerging generation isn’t as car crazy as ours, evidenced by the fact that they’re waiting longer to get their drivers’ licenses,” Belcher said. “This generation is extremely tech savvy, likes to stay connected through technology, and has less of an expectation of privacy. That means they’re more receptive to sharing rides, and to use social media to not only share the best place to get gasoline, but to report things like potholes or signal light outages. ”

The ones who are driving now want cars that have all of the capabilities of their phones.

“Every major auto manufacturer is working on a vehicle that offers the online access and real-time information drivers want, in a way that keeps the drivers safe,” Belcher said. “Ultimately, we’re moving toward the age of the connected vehicle – one that combines wireless technology with transportation systems, giving it the ability communicate with other vehicles on the road as well as the roadside itself. Hundreds of companies are working on smart technologies to support this goal.”

The result would be a car that kept the driver informed of everything from traffic tie-ups to whether he or she was veering from a designated lane.

“Smart technology and the connected vehicle have the potential to reduce the number of non-impaired accidents by up to 81 percent,” Belcher said. “These initiatives are on a par with the seatbelt in the impact they could have on safety and the environment.”

Clearly, the transportation industry is not standing still. It’s on the road to innovation – with outsourcing helping organizations accelerate the change.

Sources:
Scott Belcher, president and CEO of The Intelligent Transportation Society of America (ITSA)
Parker Williams, vice president of Transportation Solutions for ACS, A Xerox Company

With over 1,500 customers in more than 50 countries across five continents, we are today a leading technology solutions provider. Our customers include banks, insurance and financial services companies, government, manufacturing and retail sectors, and utilities. Eighty of our customers are part of the Fortune 500 list. This is an evidence of the confidence and trust that our customers have placed in us.

Service Lines

A. Software products:

• Banking: 3i Infotech’s secure banking solutions suite comprises an extensive range of enterprise banking offerings like core banking, lending, treasury, asset liability management, anti-money laundering and many more, that cater to the varied operations and departments of banks and other financial services organizations. The width and depth of our solutions offer clients limitless possibilities, giving them options to boost their performance and ROI.
• Mutual Funds: 3i Infotech offers a variety of proven mutual fund solutions for unit trust management companies, asset management companies, pension fund managers, and other financial institutions. Our solutions suite for mutual fund companies encompasses operations such as fund accounting, valuation, investment management, lending, investor services, dealing, pre-dealing, intent generation, and order management. Our mutual fund software solutions are globally acclaimed for meeting strategic as well as day-to-day operational needs.
• Capital Markets: 3i Infotech offers a wide gamut of capital market solutions for stockbrokers, traders, stock exchanges and regulators. Our capital market software solutions cover market surveillance and monitoring, Internet trading, trade order and risk management, and clearing and settlement processes.
• Wealth Management/ Portfolio Management Solutions: 3i Infotech’s multi-currency wealth management solution suite provides a highly reliable business solution for automating the entire investment life cycle across a wide variety of assets like mutual funds, bonds, equities, deposits, real estate, metals, commodities, etc. 3i Infotech also has a comprehensive wealth management life cycle solution, which is tailored for the use of advisors and wealth managers. The solution is proven, scalable, and provides the technology that allows firms to increase their level of customer services, reduce costs and enhance revenue. It captures all pertinent information regarding contacts and clients with a true relationship view and helps define clients’ goals, generate investments proposals, calculate performance and produce elegant customized reports. This solution supports the entire wealth management life cycle commencing from prospecting, risk profiling, suitability assessment, and financial planning to order placement and reporting.
• Asset Management Solution: 3i Infotech’s asset management solution is a multi-currency treasury application for asset managers, insurers and pension fund managers. It offers end-to-end investment management operations from analytics and order management to accounting and NAV generation. Strong user-defined compliance rules and workflow are integral to the product.
• Manufacturing: Manufacturing companies are looking at increasing their business value while focusing their efforts and investments on cost reduction and improved customer service. Our IT solutions for manufacturing companies revolve around one basic principle – maximizing value to customer by superior value-chain management. Our manufacturing life cycle solutions are built around our patented, successful frameworks and help our customers exceed their business objectives by leveraging operational and information technologies. This end-to-end integrated software application is a seamless, open platform that includes full-featured ERP expertise coupled with CRM (Customer Relationship Management) and SCM (Supply Chain Management) features. Our deep domain knowledge and industry-focused approach has helped us become one of the leading providers of manufacturing solutions.
• Telecom: As a leading provider of telecommunications solutions, 3i Infotech thoroughly understands every critical need of the telecommunications business – be it the challenges resulting from the ever-changing regulations, industry consolidation, emerging technologies, changing customer demands, or the ongoing spurt in customer numbers. That’s why our telecom solutions (like ADMS, Testing, IMS, etc), along with a range of BPO services for the Telecommunications sector, are entirely focused on helping our clients retain customers, develop and launch unique products quickly, and achieve faster ROI.
• Government: 3i Infotech has successfully implemented several projects for government departments and organizations across a variety of areas such as transport, urban development, land records, education, healthcare, ports & shipping, dairy, taxation, property registration, etc. With our unique Public Private Partnership (PPP) methodology, we have implemented large, complex projects through a mix of Build-Own-Operate (BOO), Build-Own-Operate-Transfer (BOOT) and Build-Operate-Transfer (BOT) models.

B. IT Services:

• Application Development and Maintenance Services: 3i Infotech offers the entire gamut of a development services, be it custom software development, testing, application integration and migration or consulting. Our software solutions are backed by deep domain expertise, industry experience, world-class technology skills, robust infrastructure and a global delivery model delivered complemented with seamless program management.
• Independent Testing & Compliance Business: 3i Infotech’s software testing and complianceservices have been helping organizations worldwide in developing a highly effective software testing strategy for realizing their most desirable software verification, validation and compliance scenarios. The activities are intended to help organizations to develop testing strategies towards a zero-defect operation. The focus is on preventing defects rather than correcting. Additionally, our services are aimed at achieving predictable time to market arising from rigorous testing standards, quick turnaround times, and low defect output at lower costs.
• Infrastructure Management Services (IMS): 3i Infotech offers end-to-end infrastructure management services customized to meet the unique needs of a wide spectrum of business customers. Our services cover all the aspects of our clients’ IT implementation including data centers, communication networks (LAN/WAN), servers, storages, databases, desktops, messaging infrastructure through a suite of service offerings such as enterprise-wide remote infrastructure management (RIM), end user support (EUS) security, convergence, storage and systems and application management. 3i Infotech also provides advisory services to customers to maximize their infrastructure investments as well as assist in optimization by integrating state-of-the-art technology solutions with best practices such as ITIL.
• Business Intelligence and Enterprise Application Services: 3i Infotech’s business intelligence and data warehousing services offer a broad range of end-to-end solutions in data management and advanced analytics, in addition to a variety of tools for business intelligence and data warehousing. Our solutions combined with the power of business intelligence, data mining, predictive analytics, and data integration provide the information in the desired format so that time is effectively spent on making more accurate, timely business decisions.
• Business Process Outsourcing (BPO) Services: 3i Infotech provides complete end-to-end BPO services for various industries. We have rich expertise in non-voice-based BPO services, having been the registrar and share transfer agent for one of the largest private banks for years. We have a team of qualified and experienced professionals, which follows a meticulously laid out workflow-based process to ensure that we do not leave anything to chance. Our customers have a comprehensive overview of operations with regular reporting and analytics to make informed decisions.

Distinctive Capabilities

Solution Accelerators. 3i Infotech with its wide range of IT solutions (software products and IT services) and BPO services transforms clients’ operations by enabling them to maximize the value of their technology investment in an efficient manner through its Solution Accelerators. Our solutions deliver an integrated solution designed to accelerate adoption and ensure our customers go to market faster. With a flexible approach, clients can go for a single solution or a combination of one or more to meet their specific needs.

3i infotech Solution Accelerators improve time to market for custom IT projects by up to 30 percent. These accelerators incorporate pre-built functionality and technology in frameworks that serve as the foundation of IT projects, along with proven best-practice methodologies and processes culled from years of technology implementation and software development experience. Together, these Accelerators provide a head start for IT projects, delivering superior results in dramatically less time.

Your Company at a Glance

Founded 1999
Revenues – $550 million as on FY10
Employees – 14,000+
Service lines:

• IT infrastructure
• IT applications
• Transaction processing/BPO

Headquarters location – Mumbai, India
Locations of global delivery centers:

• AMERICAS: Los Angeles, CA; Phoenix, AZ; Dallas, TX; Atlanta, GA; Louisville, KY; Rochelle Park, NJ; Edison, NJ, Naperville, IL ; Napa, CA; Des Moines, IA; Charlotte, NC
• WESTERN EUROPE: London, Birmingham, Nantwich, Ashby-de-la-Zouch
• MIDDLE EAST & AFRICA: Dubai
• SOUTH ASIA: Mumbai, Chennai, Bangalore, Kochi, New Delhi
• ASIA PACIFIC: Kuala Lumpur, Chengdu, China

For More Information

Telephone: +91 22 39145765
Fax: +91 22 39145703
E-mail: namrata.shah@3i-infotech.com
http://www.3i-infotech.com

Certifications

ISO 9001:2008 for BPO
ISO/IEC 27001:2005 for Data Center Operations
ISO/IEC 20000-1:2005 for Data Center Management Services
SEI CMMI level 5 (embarked on re-appraisal)
BSA SAM Certification

Awards & Recognition

• Ranked 36 (4th among Indian IT companies) in the Fintech 100 list of Financial Services & Technology providers, published by American Banker, October 2010
• Winner of the Technology Vendor of the year Award at the Middle East Insurance Awards, April 2010
• One of the top three companies in the “Service Provider of the Year” and “Technology Initiative of the Year” categories at the 14th Asia Insurance Industry Award, October 2010
• Winner of the Systems in the City Award for Superior Customer Service for the 4th consecutive year, London, May 2010
• Winner of the Best Takaful Technology Company for the 3rd consecutive year at the Takaful Awards, July 2010
• One of the top three Indian software product companies – Dataquest 2009
• One of the top 12 Indian IT companies (excluding foreign and hardware companies) – Dataquest 2010
• Winner of the WorldBlu “List of Most Democratic Workplaces 2010” Award

Analysts’ Comments

Martin Whybrow, Director, IBS Intelligence, UK – “It has been interesting for IBS Intelligence, as the industry’s primary publishing, research and consulting company in the financial services back office and operations space, to watch the evolution of 3i Infotech. We have been following the company since its outset and it has become an important player on the market. It has a broad suite of solutions, with specific strengths in primary lending, wholesale banking, Islamic banking, and wealth management and has a varied, international user base.”

Catherine Stagg-Macey, Senior Analyst, Celent – “3i Infotech has a solid offering for insurers in emerging markets, which is supported by a capable onshore/offshoreservices delivery arm. In mature markets like North America, the established BPO services and growing IT services offerings position them well for the cost-focused coming years in the Insurance sector.”

With over two decades of proven experience in technology and enterprise IT infrastructure, Allied Digital has successfully deployed and managed complex IT infrastructures for enterprise and government customers worldwide. Our best-fit solution design expertise, system integration capabilities, holistic efficiency-planning processes, rapid implementation and meticulous governance methodology helps organizations to seamlessly align their business goals with technology and reduce their total cost of ownership using a combination of onsite and remote services.

Our capabilities provide the operational footing for a diverse portfolio of end-to-end business technology solutions and services including onsite and remote infrastructure management services, unified communications, networking, integrated solutions and cloud solutions.

Service Lines

Allied Digital’s Infrastructure Management Services (IMS) provides both onsite and offsite (remote) technology services for your organization offering you a true virtual CIO/CTO experience. Allied Digital’s gamut of services covers the entire range of IT assets of your organization from desktops to datacenters integrating all your IT assets for seamless performance and a truly harmonized work environment including:

• Enterprise management services
• Datacenter support services
• Cloud computing management services
• Deskside support services
• Service desk
• End-user support services
• Enterprise security services

Allied Digital’s Desktop Management Services combines effective usage of tools and expertise to ensure the health and performance of thousands of desktops, laptops and other computing devices across your organization. It’s a component of systems management, which is the administration of all components of an organization’s information systems. It enables the execution and management of key tasks remotely in a secure environment. Allied Digital frees your IT staff from manpower-intensive tasks, resulting in greater end-user satisfaction and better productivity at reduced costs. We remotely monitor and manage patches and anti-virus for desktops/laptops, resolving approximately 80% of the tickets raised by a central helpdesk remotely from our global command center.

Distinctive Capabilities

ADSL is a scalable service organization with acute sensitivity to the organizational objectives, IT strategy and financial goals of our clients. We pursue each engagement in a consultative, vigilant and methodical manner and constantly evaluate the obligations and expectations we establish with our clients, vendors and internal organizations. Our “best shoring” solution implementations offer a balance between cost benefits and local customer service. ADSL’s internal performance-based management, service delivery and infrastructure measurement criteria are designed to meet the needs of our customers.

For More Information

Allied Digital Services, LLC
18701 S. Figueroa Street
Gardena, CA 90248-4506
ADSL.Contact@allieddigital.net
www.allieddigital.net

Certifications

• Microsoft Gold Certified
• Microsoft Services Solution Large Account Reseller (LAR)
• Microsoft Security Software Advisor
• Cisco^® Gold Certified

Case Studies

Allied Digital’s retail IT services help to support the rapid growth of a retail presence for an established clothing distributor to improve brand awareness and create product flow flexibility.

Reputed financial services firm improves their security monitoring with ADSL 24×7 Information security surveillance.

Nearshore, offshore, onshore, best shore

Although “nearshore” is a favorite model and buzz term bandied about in outsourcing news and advisories today, it will soon fall by the wayside. First of all, it’s a misnomer. “Nearshore” to Japan, for example, is China or Vietnam; but those two service delivery locations to U.S. and European businesses are “offshore.” Brazil is a nearshore provider but also a large onshore provider.

Genpact predicts nearshore service delivery centers will likely continue to grow, but not as significantly in dollars or percentages as the offshore centers. According to Robert Pryor, Executive Vice President of Sales, Business Development and Marketing, we’ll likely see an increase in the use of onshore centers. “Federal, state, and local governments will drive this growth in terms of the attractiveness of incentives they create to stimulate domestic job growth.”

Deepak Patel, CEO, Aditya Birla Minacs, says the decision between nearshore, onshore, or offshore is “not so much about achieving scale but, rather, is about delivering the right value to companies by providing the ideal mix of the right delivery destination and the right knowledge set available. In the coming years, newer geographies will emerge, but smart outsourcers will choose the destination that brings the most value.”

John A. Haslinger, Vice President, Product Marketing at ADP, says, over time, he expects labor arbitrage advantages will remain but increasingly companies will balance them against the need for particular skill sets. In HR, for instance, “companies will balance labor arbitrage with the service provider’s ability to foster long-term relationships.”

Allied Digital Services’ President, Kevin Schatzle, believes nearshoring will increase over the next two years because outsourcing in general will increase. He predicts that in five years, as the industry matures, Canadian pricing will start to approach U.S. costs.

Gordon Coburn, Chief Financial & Operating Officer at Cognizant says globalization initiatives are evolving “from a point-to-point delivery model to a many-to-many model where the provider delivers from many locations in the world to a client’s locations in many other parts of the world.”

Rajan Kohli, CMO, Wipro Technologies, adds that “best shore is the way to go. That may mean a combination of nearshore and offshore, or it may mean just offshore. Buyers will need to make decisions based on cost, business value, and business availability.”

Ritesh Idnani, COO, Infosys BPO, says “the trend of nearshoring will continue to gather steam. But the global economic landscape has definitely mooted the call to a more protectionist outlook by countries, and that trend will continue in the short term. They will, however, have to bear the brunt of continuous monitoring to ensure they continue to be cost effective and build in efficiencies. The ‘offshore train’ left the station several years back; hence, offshore will continue to grow in volume and market share.”

Dina Kholkar, Head, BFSI, TCS BPO Services, predicts that the definitions of onshore, nearshore, and offshore will blur over the next couple of years because providers “will increasingly expand their base to build a global network delivery model to address the diverse demands. There will also be an increasing creation of Centers of Excellence by function,” she states.

The future shift from focusing on nearshore / offshore / onshore debates is nowhere more evident than at HP where there is now a “Best Shore Services” division. Even so, Jeff Womack, Vice President Global Enablement, HP Best Shore Services, says HP believes that nearshoring will “continue to have a seat at the global delivery table because companies – especially in the European Union region – will want the cultural affinities and languages as well as aspects of data privacy.”

Womack also points out that some nearshore locations are already maturing to the point that they no longer meet the requirements to qualify as a true nearshore location because costs begin to reach parity with major markets such as the United States, Western Europe, and Japan.

Yugal Joshi, Senior Analyst, Everest Group, says that, “with offshore suppliers seeing their tax exemptions going away, the cost-effectiveness of their large offshore centers will reduce significantly, which will prompt them to go nearshore.”

Don Schulman, General Manager, Global F&A and SCM, IBM, predicts nearshoring will grow in the short term because organizations will continue to perform high-level activities (such as budgeting and corporate tax) discretely and locally – regardless of whether shared services or outsourcers are doing the work.

“This is less about nearshoring and more about growth due to more complex work moving into a shared-services environment,” Schulman explains. “Success in outsourcing has led to this kind of work moving to a centralized environment. Organizations are beginning to look at their shared-services strategy as a hybrid model. It is not an either/or decision but, instead, a multi-dimensional approach that leverages both internal shared services and outsourcing.”

Industries increasing adoption of outsourcing

Nearly all of the service providers whom we tapped for insights anticipate that the U.S. healthcare industry will experience a dramatic increase in outsourcing over the next two to five years.

Pryor at Genpact says the significant cost pressure and large number of additional people that will need coverage will require that the industry adapt rapidly in leveraging technology, outsourcing, and reengineering to change business models and cost structures.

Most of the executives we interviewed also predict a large uptick in government outsourcing in the next few years. Schatzle at Allied Digital Services says government and education will migrate to outsourcing for IT support and “will receive great benefits of modern approaches.” He advises that buyers in these segments especially need to evaluate IT services from security and redundancy perspectives.

Kohli at Wipro predicts the next few years will see “BPO opportunities arising in retail, manufacturing and media, but in forms as not serviced before.” He says the driver for this growth is the convergence of the Software-as-a-Service (Saas), cloud, and ITO/BPO models “plus the ability of Tier-1 providers to do business function outsourcing.”.

Gopal Devanahalli, Vice President, Infosys BPO, believes the banking industry “will undergo big changes post the financial meltdown.” Increased regulation will lead to a focus on more outsourcing of such processes as treasury, cash management, and custody. He also predicts the intersection of mobile and social technologies will disrupt traditional branch banking, which will lead to more outsourcing.

Patel at Aditya Birla Minacs points out there is a huge pent-up demand in the midmarket, and these companies will turn to outsourcing as a strategy for becoming more competitive in the marketplace. (Also see Risks and Complexities in Outsourcing Decisions in the Midmarket.)

“Practically every industry today is grappling with challenges associated with the global financial crisis, increased regulatory compliance requirements, and content digitization / Web 2.0 environment leading to newer paradigms. There is a need to be able to respond agilely to the market through leaner, meaner organizations,” says V. K. Raman, Head, Domain Services, TCS BPO Services. This is especially true in the Banking, Financial Institutions and Insurance (BFSI), life sciences and healthcare, retail, and government sectors. Raman says these industries will drive outsourcing in the next few years.

Miles Lafferty, Vice President, Hinduja Global Solutions, believes currency fluctuation, particularly the U.S. Dollar and the Euro, and related cross-regional economic policy and ideology will create uncertainty in global sourcing decisions. “That said, this uncertainty will reduce the appetite of many organizations to build captive centers, thereby creating opportunity for outsourcing service providers.”

Regional hot spots

There was a definite consensus among the experts we interviewed regarding opinions on which regions will have more companies turning to outsourcing in the next two years to address their business needs (other than the United States or Europe). The top regions they cited are:

1. Asia Pacific
2. Middle East
3. Latin America
4. Japan
5. Australia
6. India

Most believe that the BFSI industry will lead the way in these countries, just as it did in the U.S. and European early adoption of outsourcing.

Japan is at the forefront because it continues to struggle with a difficult economic climate, says Schulman at IBM. He says that the driver for growth in Latin America and parts of Asia is the large numbers of organizations with a disparate spread of employees and business units across multiple locations and borders

Infosys BPO says the drivers in these regions are cost and process efficiencies at the lower end. But there is also some outsourcing of analytics related to understanding market customer behavior, as well as some outsourcing of vertical-specific functions.

Deepak Rastogi, Senior Vice President, Global Strategy at Hinduja Global Solutions, says ultimately much of the growth in these regions will be consumer driven in the telecom, financial services, and healthcare industries.

Business processes

Which business processes/functions will move to the outsourcing model in the next two to five years? Our experts listed the top three:

1. Analytics – The driver is the need to leverage fact-based insights to improve reporting results, recognize and understand potential opportunities, and deliver better business outcomes.
2. Manufacturing supply chain – Factors driving growth in this area are purchasing cost reductions, cash flow advantages, operations cost savings; and increased business effectiveness (such as shortage management and the capacity to implement advanced logistics models).
3. Work that today appears extraordinarily complex (such as industry accounting, external reporting, planning, budgeting, forecasting) will move to outsourcing as these processes become standardized.

Selecting a service provider

Charlie Bess, HP Fellow, HP Enterprise Services, advises that buyers in these hot spots should look at how service providers invest in making their processes more standardized and their capabilities more flexible, as well as what they are doing to prevent unnecessary business interruptions.

“Investing in automation, for example, is important,” says Bess, “but you need to look under the covers and see what the provider’s approach is when the automation doesn’t work. Rowing harder with new tools may not always be the right answer; you might have struck something unexpected and need to change course.” He advises buyers to ask: “What is the escalation process when the unexpected occurs?”

Abid Ali Neemuchwala, Global Head, TCS BPO Services, warns buyers to seek providers that have the ability to scale and grow across new geographies to support green field ventures.

According to Kohli at Wipro, the most important criteria should be whether the provider can show significant value beyond labor arbitrage and can deliver on the commitment. “All other criteria such as a combination of BPO and IT, cultural fit, quality, and scalability are reflected in the above two major criteria.”

Selecting healthcare service providers will be a big risk, according to Kohli at Wipro. “The key selection criterion should be the provider’s commitment towards timely and quality deliverables, as there is no scope for errors in this zero-error industry.”

Kholkar at TCS advises buyers’ provider-selection criteria should include cultural fit, relationship management ability, and certification from compliance authorities.

IBM’s Schulman says buyers should ensure that their service providers are able to view their processes at a granular level on an end-to-end basis including any portion that the buyer retains. “This is critical to truly understanding a client’s business and being able to effectively collaborate with them to optimize business outcomes.”

One of our key differentiators is that we have the global resources and financial stability of a large firm but the nimbleness of a small firm. Another differentiator is that we work equally well with multinationals, Fortune 500 companies, and with entrepreneurial, smaller organizations. This is not only because our executives have backgrounds with in-depth experience in all sizes of organizations but primarily because we don’t use a cookie-cutter approach to our services.

Insigma’s tagline, “Your best fit for valued business results,” is far more than a slogan. We know that one size does not fit all, and we don’t try to fit our clients into predetermined solutions. Instead, we collaborate with them to develop the best solution that is relevant to their unique circumstances. In addition, we use a TLC approach (Thinking, Learning, Creativity), which ensures we share our thinking and interact with clients’ learning and turn that into added value.

We look for opportunities to build mutually beneficial long-term relationships, as we believe this gives us optimal avenues to provide greater value for our clients.

Service Lines

IT solutions

• Infrastructure services – Consulting, designing, system integration and management in the following: Green IDC, green data center solution; system high-availability solution; business continuity and disaster recovery, data management, backup, and recovery; virtualization; data center integration; network installation and optimization; network security; network hosting and database maintenance; high-performance computing; middleware; and desktop.
• Application services – Application development and maintenance, system integration; system/application testing; implementations of emerging technologies; replacing core systems; BPM tools; analytics, service-oriented architecture; reducing application complexity and cost
• Legacy system reengineering/modernization
• Research and development – Insigma has developed and tested thousands of software products and provided ongoing tech support services. We are uniquely qualified to partner with our clients not only on the engineering side but also in go-to-market initiatives. Our R&D services span the life cycle including: engineering, prototyping, testing, quality assurance, incubation labs to test marketability, productizing, manufacturing, and distribution. In addition, as a core member company of the China national R&D programs in IT business, Insigma also participates in key Chinese R&D development programs. From 2009 – 2010, many of our engagements in China national-level projects centered on the Linux platform.
• Managed services – We provide a full spectrum of support services including service desk, incident management, problem management, and change management. Our proprietary managed services tool (IT Manager) provides clients with remote network monitoring and incident alert functions, and supports automatic activation of clients’ network incident management process. ITManager Services Management System (ITSMS), our proprietary process management tool, provides standardized processes in jobs such as network configuration, incident management, change management, release management, etc.

BPO solutions

• Finance and Accounting – Accounts payable, accounts receivalbe, collections
• Payroll
• Contact Center services – Inbound (IT help desk, product support, customer service); outbound (telemarketing, market research, database updating, new product release, follow-up call service, customer care)
• Data entry (all types of documents, multiple languages, and remote management)
• Document management – Including digitization, archiving, and indexing
• Image collecting services
• Insurance claims processing
• Financial services – Corporate banking services, loan processing, credit card processing

Financial Services – Solutions in banking and capital markets, ISVs and exchanges, knowledge services (market data and analytics), trading and settlements, asset and wealth management, corporate banking, mutual fund custody, foreign exchange trading, portfolio evaluation, equities trading, fixed-income trading, collateral management, and online banking). Insigma is a member of the Wall Street Technology Association

Healthcare – Solutions for providers (large hospitals, large national institutions, small clinics), life sciences firms, medical device companies, and pharmaceutical companies.

• Our healthcare consulting expertise includes HIPAA compliance, ICD-10 coding migration/compliance, Blue Cross and Blue Shield plans, reporting and analysis systems, automating claims processing, designing payment systems, conducting clinical trials and epidemiological research; enabling Medicare and Medicaid fraud and abuse monitoring and enforcement; designing healthcare delivery systems; and implementation of packaged healthcare software.
• ICD-10 Testing Services. Insigma’s ICD-10 testing solution uses a distinctive method for creating accurate clinically based test cases.

Telecommunications – Insigma develops core supporting applications and value-added service systems for the telecom and wireless industry in China under the brand name of Telescope®. The Telescope^® suite provides features the following components: integrated customer management, business operation analysis, and resource configuration and management.

Government – Our e-government solutions are designed to establish an information service platform backed up with government-related data. With such platforms, enterprises can complete multiple tasks such as Web-based business license annual review and examination, Web-based tax filing and Web-based fee payment after their identities are authenticated. We also have an “Intelligent City” suite of innovative solutions that addresses the severe challenges in China’s fast-growing urbanization.

Energy – Insigma has taken a leading role in environmental protection and new energy technologies as well as equipment manufacturing. Innovative solutions and services include design, procurement, and project management for testing and after-sales maintenance in such areas as wind power generation, power plant solutions, and rail transportation.

Distinctive Capabilities

• We can provide clients with access to the China market. Insigma is nearly a US$1 billion enterprise and has a very strong presence in the Chinese economy in several key industries. With our longstanding relationships with local banks, healthcare institutions, and governments, combined with office locations in all the major Chinese cities, Insigma can act as a bridge spanning the gamut of several major Chinese industries and assist our worldwide clients in accessing the China market.
• ICD-10 Testing Services. Insigma’s ICD-10 testing solution uses a distinctive method for creating accurate clinically based test cases. It supplies large amounts of ICD-10 transactional data required for making accurate decisions on IT system remediation, analyzing and performing business-outcomes modeling, and identifying trends and patterns against current and proposed ICD-10 business rules. Our ICD-10 test data is based on clinical records that have then been coded in ICD-10. This database becomes the “gold standard” for payers and providers. It is the source of truth at the event level, which then can be used to predict what will happen in the ICD-10 world. The services are also delivered at a fraction of the cost of testing solutions in the marketplace.
• Legacy system modernization. Our suite of proprietary tools allows us to reverse engineer the code in legacy applications and create new source code, revitalizing a legacy application and extending its life. By working closely with you to understand the complexities of your organization’s unique systems, we enable your functional enhancements while maximizing your existing IT investments and conducting a fast, low-cost and low-risk transition. In addition to high performance, scalability, and maintainability, benefits of our legacy system reengineering solutions includes cost savings of at least 60 percent compared to developing a new system; fewer development risks; shortened system development cycle; and no disruption to business continuity.
• Cost optimization. Cost optimization is a key component of our methodology. We assure our clients the lowest total cost of ownership (TCO) and cost that is optimized to value. Our cost framework also ensures transparency, no hidden costs, no cost creep and proactive risk mitigation. In addition, we use a process of effective distributed development and also drive continuous improvement to create longer-term value for our clients.
• Financial services. Our clients include many of the world’s leading banks. Insigma is the first Chinese company to tap into Wall Street (through co-sourcing efforts with State Street); we have a joint venture with State Street, the world’s leading provider of financial services to institutional investors. Additionally, in Japan, Insigma is recognized as one of the top five outsourcing service providers.
• Standards development. Insigma was selected to participate in developing the Chinese IT Management Service Standards initiated by the Chinese Ministry of Information and Technology.

Insigma at a Glance

Year founded: Insigma Technology Co., Ltd. was established by IPO in 2001 when it acquired and consolidated several well-established IT and software companies in China that had been providing IT services since 1989. We established operations in the United States in August, 2008.

Service lines: IT infrastructure and applications; R&D, BPO, Financial Services, Healthcare, Telecommunications, Insurance, Government, and Energy

China headquarters: Hangzhou, China
U.S. headquarters: New York City
Global development centers are located in 31 cities on four continents: US, Japan, Europe, China

For More Information

Telephone: +1 (888) 815-5698;
contact@insigmaus.com
www.insigmaus.com

Certifications

ISO/TEC 27001
ISO 9001
CMMI 3 (and above in some service lines)
ITIL V2

Awards and Recognition

2011

• Ranked #40 and a ”Leader” in IAOP 2011 Global Outsourcing 100 Service Providers (sub-list rankings include: Best 10 Leaders - Research & Development Services, Best 20 Leaders - Information/Technology Services, Best 20 Leaders - Telecommunications, Best 20 Companies – Government, and more)

2010

• No. 45 in IAOP 2010 Global Outsourcing 100 (International Association of Outsourcing Professionals); includes sub-list ranking for Best 10 Leaders by Service Provided – Financial Management Services, Best 20 Leaders by Service Provided – Transaction Processing Services, Best 20 Leaders by Industry Focus- Telecommunications
• No. 5 among listed IT companies and No. 388 in Fortune 2010 500 Chinese Listed Companies (Fortune Magazine, Chinese edition)
• Ranked among “100 Companies that Define Global Outsourcing” (Global Media Services)
• Top 3 Chinese Software Product Brands Award (Ranked by Ministry of Industry and Information Technology)

2009

• European and North America Outsourcing Top 5 (IDC Offshore Outsourcing Market Report)
• No. 2 in 2009 China Outsourcing Best Practices Enterprise Top 50 (Devott Co., Ltd., an international consulting company on outsourcing services)
• Ranked in China’s Power of Ten in 2009 (recognizing potential to lead in overseas markets, ranked by Deloitte & KPMG, published by Computer World Hong Kong)
• Top 100 Innovative Service Providers of 2009 (Global Services and neoIT)
• Y2009 Best Business Practice for Promoting International Service Outsourcing Development (Sponsored by China Business Appraisal Association together with Global Outsourcing Information, Global Services (USA), Outsource UK and other industry media)
• Our citizen card platform solution received the Golden Ant Award, the highest industry recognition by the Chinese government.

2008

• Top 15 Brands of Software Import/Export and Outsourcing (China Software Import and Export Magazine)
• No. 6 in China top 100 e-Government Service Providers

2005 – 2007

• IBM “Government Top Business Star”
• Largest “Top China-based IT Outsourcing Vendor” (“Riding the Dragon: Technology in China,” IMP Securities)
• Technology Fast 500 Asia Pacific ranking (Deloitte)
• Gartner research report excerpt: “Insigma took more than 100 ‘four-cylinder’ applications that were at the end of their useful life and revamped them for ‘supercharged V-8 capability’ – not just adding more power but reengineering them for greater extensibility.”

Customer Case Studies

• Thomson Reuters (quality assurance; testing)
• State Street (fund administration legacy system reengineering)
• Tax auto optimization system

As a wholly owned subsidiary of Neusoft Corporation, Neusoft IT Service Co. Ltd. focuses on providing top-quality offshore BPO services to a worldwide customer base. We provide one-stop BPO services of various types in multiple languages to China, Japan, Korea, Europe, and America. Services include front-office outsourcing such as customer service, technical support, application support, and help desk, as well as back-office outsourcing ranging from HR outsourcing to Web content management. Our BPO services cover a wide range of industries such as IT, education, government, telecommunication, manufacturing, retail, and consumer products. With more than 20 international clients, Neusoft has become a well-known BPO service provider in China.

Service Lines

Contact Center Service: We provide a blended service that covers IT Helpdesk, Application Support, Customer Support and Product Support with various service channels including voice, Web, e-mail, and fax. All the services are included with delivery capabilities of 5X8, 7X12, and 7X24 to suit different customers’ needs. Neusoft is capable of providing multi-language support to global companies for their local support in Japanese, Korean, English, Cantonese, Mandarin, and some other small languages in Southeastern Asia such as Bahasa, Thailand, Vietnamese, Malay, etc. Over the years, Neusoft has won the trust and satisfactions from a number of customers for excellence in call center support, and in 2006, Neusoft customer contact center was granted “China’s Best Contact Center Award.” Our technical support team is staffed with highly trained professionals with extensive experience in applications, network management, and technology operations. Our proven ability to scale rapidly, both in volume and skill sets, enables us to meet the top standard of customer service.

Back Office Service: We provide Finance and Accounting Outsourcing, Human Resource Outsourcing and Web Content Management.

• Neusoft FAO can offer a unique and reliable service for our customers with profound domain knowledge and rich experience. Neusoft’s Global/Domestic Services Centers provides advanced infrastructure, with multil-level security and privacy controls, and failover redundancy to help ensure business continuity.
• Neusoft’s HRO service aims to reduce and eliminate inefficiencies in personnel management. Through our proprietary HR management platform and system Neusoft can customize our service to fit the client’s needs. Having partnered with a famous global HR consulting service provider, we are capable of offering an end-to-end HR total solution, from employee entry to exit. Neusoft is also the leading ESP (Education Service Provider) in China, which owns three Information Institutes and Training Bases. This also is the resource base from which we provide HRO services. With optimal quality management methodology and expertise, Neusoft HRO services help our customers enhance the operation efficiency and productivity.
• Neusoft believes that Web content management must support the efficient creation and management of Web content, mechanize Web-related processes, distribute the right content in the right context, and continually improve overall service quality of our clients’ Web-based services. Furthermore, a 24/7 real-time service model can guarantee the prompt reaction/management of the Web content uploaded, thus to assure customer satisfaction. The services Neusoft provides have brought our clients substantial, measurable benefits, as well as quantifiable gains in quality and operational efficiency at significantly lower costs

Data Center Service: With state-of-the-art infrastructure and facilities, we provide a full spectrum of data center services from collocation to hosting to value-added services. Our data center is built up conforming to international standard, with redundancy for power and network connection, strict security control both for physical entries and network access. We support multiple platforms and diversified vendor hardware systems in our hosting service to meet customers’ requirement. We have our customer’s core system hosted in our data center, and monitoring, maintenance and application supports are conducted by our engineers to ensure high availability and service level.

IT Service: As a leading IT services and solutions provider in China, Neusoft has quickly become a leader in the IT managed services industry for the APAC region. Our domain expertise, strategically placed delivery centers, wholly owned IT Institutes, and innovative approach have enabled us to provide an IT-business integrated solution in multiple languages for our global clientele. As the single point of contact and accountability, Neusoft will reduce TCO and simplify delivery of our clients’ IT services

Distinctive Capabilities

• Cross-Industry Experience. Neusoft Corporation currently has over 15,000 customers worldwide in virtually every industry. This rich experience allows Neusoft to understand and incorporate our partners’ industry-specific expertise.
• Technological Know-How. We have accumulated a vast amount of IT experience through our worldwide partnerships and internal resources. We have an abundant number of engineers certified by Cisco, Oracle, Microsoft, HP, and Sun.
• Advanced Infrastructure.
  Neusoft has top-notch infrastructure and a reliable platform.

Neusoft at a Glance

Founded in 1991
2009 revenues： US$596 million
Employees： 18,000
Service lines: Business processes, IT infrastructure, IT applications
Headquarters location：Henyang, China
China presence: 8 regional HQ, 7 Software Parks, 16 R&D Centers, 3 IT institutes, and a sales network covering 40+ cities across China
Global delivery centers: U.S., Japan, Hong Kong, India, Hungary, UAE, Finland

For More Information

Telephone: +86 411
Fax: +86 411 84832111
E-mail: bpo@neusoft.com
www.neusoft.com

Certifications

• ISO9001:2000
• ISO/IEC 20000-1:2005
• CMMI (V1.2) Level 5
• SEI PCMM ML3
• ISO/IEC27001:2005

Awards and Industry Recognition

• Listed in the “Global Outsourcing Top 100″ for consecutive years, even in the Top 25 for the first time in 2007, and in 2010 was ranked No. 26 by the International Association of Outsourcing Professionals (IAOP)
• Listed among the “Global Services 100″ and ranked No. 1 in the “Top 10 to Watch in Emerging Asian Markets” for consecutive years. In 2009, Neusoft entered the “Top 10 Best Performing IT Services Providers” and “Top 10 Leaders of Human Capital Development” published by U.S.-based magazine Global Outsourcing and neoIT.
• Neusoft’s call center manager was awarded by CNCCA ‘China Best Contact Center Manager’ for five consecutive years starting in 2006
• Neusoft’s call center service was awarded “Contribution Award of China 10-year Call Center Development” in 2007

Case Studies

• We provide customer and technical support for a U.S. based global leader in information security & management solutions facing Japan and GCR consumers. By delivering the service, Neusoft helped the client to consolidate, simplify, and reduce cost for their global operations.
  http://www.neusoft.com/en/service/1214/
• Neusoft employs Six Sigma analytical acumen and rigor to continually monitor, measure, and validate and, where needed, recalibrate the effectiveness of our talent-management programs. We apply science to people processes to allow for the eventual engineering of flexible and scalable Human Resource IT and management solutions. We are support a large global PC manufacturer with HR services.
  http://www.neusoft.com/en/service/1212/
• We worked with a leader in IT Software and Services Provider for Level 1 – 3 support for its more than 10,000 employees located in China and abroad. For this client, Neusoft drives continuous improvement in quality as well as higher efficiency through process reengineering.
  http://www.neusoft.com/en/service/1405/

Neusoft Facilities

Our 20-year history in the outsourcing industry provides in-depth expertise in various service lines and promotes a customer-centric support system:

• Quality Assurance – 99.5% accuracy rate
• Multiple Cost Options – Onshore, nearshore, offshore, and on-site models
• Offsite & On-site Solutions – On-site services can be performed at almost any location within the United States.
• Measurable Results – Our online Web Audit System allows clients to easily monitor volumes, audit processes, and identify errors from any computer with Internet access.
• Client System Integration – Our services allow interfacing and integrating with third-party systems to take advantage of existing systems or frameworks and supplement them with improved technology and processes.
• Advanced Technology – DATAMARK invests in new technology so our clients don’t have to, allowing them to remain current in terms of technology and innovation without incurring the training and capital expenses traditionally involved.
• Privacy & Security – Extensive measures ensure that all sensitive data is safeguarded against loss, theft, and unauthorized use.
• Disaster Recovery – Disaster recovery and contingency plans protect customer data from disruption and power failure.
• 24/7 Support – Support personnel are available around the clock.

Service Lines: Business Processes

Outsourcing Services

• Transaction Processing
• Customer Service
• Finance & Accounting
• Transformation Services
• Operations & Process Excellence

Domains

• Banking & Financial
• Freight & Transportation
• Government
• Healthcare
• Insurance
• Manufacturing
• Marketing & Fulfillment

Key Differentiator

Client Satisfaction and Longevity: Our top clients have been with DATAMARK more than 15 years. We have positive, growing relationships with many Fortune 100 company clients in such vertical markets as banking & financial, freight & transportation, government, healthcare, insurance, manufacturing, and marketing & fulfillment.

DATAMARK at a Glance

Founded: 1989
Employees: 2,000
Service Lines: Business processes
U.S. Headquarters: El Paso, Texas
Global Delivery Centers:
     U.S.: El Paso, San Antonio (client site)
    Mexico: Juarez
    India: Chennai

For more information

Telephone: 800-477-1944
E-mail: info@DATAMARK.net
www.DATAMARK.net

Case Studies

1. The economic downturn forced this carrier to reduce operational expenses associated with lower tonnage per shipping lane, volatile fuel costs, and increased competition due to excess capacity. The carrier turned to DATAMARK and its proven Process Migration Methodology to streamline workflow, create efficiencies through standardization, and leverage global delivery centers taking advantage of “follow the Sun” principles to reduce billing errors and decrease the resulting revenue adjustments. http://www.datamark.net/uploads/files/17-file-top_25_transportation.pdf
2. Rebate offers vary greatly among manufacturers and distributors. The processing of rebates must be customized for each client/offer combination to yield the high standards of quality today’s customers demand. Underestimating this critical aspect and attempting to transition processing operations without adequate planning can result in poor quality and damage to longstanding customer relationships. http://www.datamark.net/uploads/files/18-file-outsourcing_rebate_processing.pdf

Ray Camp, Sr. Vice President, ACS, a Xerox Company; Kay Bateman, Programs Asst. Adm., OKDHS; Jason Boswell, Oklahoma Project Manager, ACS, a Xerox Company; Mike Langenohl, Sr. Vice President, ACS, a Xerox Company; Beth Ellyn Rosenthal, Editor, Outsourcing Center; Lisa Henley, Director of Electronic Payment Systems, OKDHS; Howard Hendrick, Director, OKDHS; Debra Floyd, COO, Outsourcing Center

Best Applications Outsourcing: Oklahoma Dept. of Human Services and ACS, a Xerox Company

Awards Criteria: Best use of outsourcing to achieve the buyer’s objectives for ITO while also achieving mutually beneficial outcomes.

The Oklahoma Department of Human Services (OKDHS), which serves over one million families, has won 19 awards (before this one) for being first in the nation, thanks to systems ACS, A Xerox Company, created for it. ACS built electronic payment systems from the ground up to support the OKDHS’s mission.

The situation prior to outsourcing

The OKDHS, like other states, used paper claims to process and audit childcare services. The time it took to process and audit 43,000 kids and 4,300 provider claims manually “just took too long,” recalls Henley. Some providers had to wait six weeks to get paid.

Henley says childcare claims accounted for 20 percent of the workload of the business and claims audit unit but took 80 percent of its time. In addition, the OKDHS estimated overpayments totaled 10 percent. That translated into $10 million a year in fraudulent claims.

The OKDHS wanted to create an electronic benefits transfer (EBT) system to provide authorization for the state’s childcare subsidy. It already had SNAP (Supplemental Nutrition Assistance Program) benefits on EBT cards, which are similar to bank ATM cards that clients use in grocery stores in lieu of food stamps. (The federal government changed the name in 2008.)

The system ACS created manages day-care time and attendance. Parents swipe the card through a point-of-sale (POS) terminal at the day-care center. The state receives an immediate verification of the time children spend at the center.

“Our final objective is to make our systems benefit our users and not make them feel like they’re welfare recipients,” Henley says. Joseph Doherty, Executive Vice President and Group President, ACS Government Solutions, adds, “Lisa always challenges us to think more deeply about her constituents so our systems are more convenient for them.”

Results

Henley says building these complex systems “would have been untenable by the agency alone.”

Improved processes and new technology have saved money over time. Henley reports the original childcare contract was $5.25 per child per month. It’s now $2.97. SNAP costs have fallen from $1.99 to 89 cents.

The state has saved 10 percent of its childcare budget or $10 million a year. Henley says the state used that money to provide grants to day-care centers across the state, “which benefits all kids, not just subsidy kids.” So far the program has funneled $70 million to this program.

Today the childcare system “runs better, easier, and on its own,” according to Henley. From day one, it has paid at 100 percent accuracy on 30 million card swipes a year. The providers are also pleased they don’t have to fill out paperwork. One large center with 300 kids employed three people to do nothing but file claims. “Now they just have to watch the kids,” says Henley.

Provider satisfaction was 20 percent when the program started. Today it is 89.63 percent, she reports.

The OKDHS staged the nation’s first automated childcare conference because it had so many requests to learn about this system.

Henley says this project “has been so successful, outsourcing has become attractive to all our business units.”

When the childcare system didn’t work

The initial roll-out of the childcare system was phased until problems surfaced and the partners stopped the project. ACS was the prime, but had subcontracted the transaction processing to another party. ACS actually purchased another company, Transaction Processing Services, to resolve the issues.

Henley says the partners had “to rewrite every part of the system design after the purchase.” She says “we sat down together and negotiated.”

Henley admits the OKDHS did “very little” to help ACS initially. “It was our mistake,” she admits. In addition, the OKDHS’s technical staff advised not to roll it out because it wasn’t ready. “But we ignored them and rolled it out anyway,” reports Henley.

Another problem was the two embarked on the project without service level agreements (SLAs). “That was a stupid thing to do,” Henley says in retrospect. Version 2 had SLAs.

As a result, the partners introduced “a very bad system” to 17 counties. The result: “We had some very angry providers because the system wasn’t working.” The media covered one angry meeting in Lawton. Henley knew it was going to be a tough meeting; driving to Lawton she saw cars with stickers that said, “DHS sucks.” Attending were 60 child-care providers and 30 DHS staffers. “One provider stood up and said, ‘If I had a gun, I’d shoot y’all right now,’” reports Henley.

She says “ACS took all the heat. They said, ‘We’re going to resolve these issues and provide a better system.”

The problems forced the OKDHS to reevaluate. The Department determined it had to change project directors. Then it formed teams to help ACS, which rebuilt the system after spending hundreds of thousands of dollars on the initial version.

The change was “phenomenal,” reports Henley. “Both the clients and service provider became engaged. We searched for solutions together.” For example, the original system took 23 steps for parents to swipe their card at the childcare provider’s POS terminal to check in a child. Lines formed and parents were late to work. Retooling the system reduced the steps to eight. It now takes 15 seconds to check a child in/out.

Once ACS reworked the system based on the findings from focus groups, it did a big-bang conversion. “If you’ve tested your systems properly, there’s no reason not to go ahead. You have no business rolling them out if you haven’t done the proper testing,” Henley explains.

There were unusual issues. One childcare provider called to say her POS machine was hot. ACS rushed over to discover she had put the machine on a heater and it melted. “So it was hot,” Henley says with a laugh.

The chance at a mulligan had another, unanticipated benefit. It also helped OKDHS “understand our client and provider base better as well,” Henley observes.

The two partners learned from the childcare problem. Subsequent conversions went smoothly. “We have few unanticipated issues because we are now active participants in every step of the process,” Henley reports.

Why this relationship works

Henley says unlike other providers, “ACS actually drills down and learns the program. You don’t see that very often.” ACS engineers actually came to her often to discuss her policies. They told her more than once, “You have a policy that’s causing your staff more work. We can automate and improve your accuracy,” she reports. They also read the agency’s voluminous policy manual so they could ask “thoughtful and provoking questions to understand how our systems work.” This was important because she felt their knowledge “helped us build a better system.”

Whenever Henley has a question, she says ACS has the answer. “They really do their homework,” she notes. But so does she. She participates in production calls and helps write design documents. “I know how many abandoned calls we have,” she says.

ACS also is willing to do the near impossible. On example was the OKDHS wanted its funds expunged back if a debit card was undeliverable or hadn’t been used in 90 days. No state’s system had been able to do that because they felt federal Regulation E prohibited it. Henley read the government’s obfuscating prose, then worked with ACS’s legal department. The result: it allowed the service provider to create a system that returned funds back to the OKDHS. “Bam, we did it,” she boasts.

ACS will take on new tasks that seem to be peripheral to applications outsourcing. For example, the OKDHS asked ACS to take over the banking involved in the debit cards. “Most states keep the direct deposit information and outsource the debit card,” she explains. But Oklahoma felt the social workers had better things to do than worry about bank deposits. They also had an eight percent error rate. “The change makes good business sense because it gives our clients a single point of contact to call for a problem,” says Henley. “ACS never told me, ‘Sorry, we’re really not in that business.”

Henley adds, “We’re not afraid to fight with each other. And we’ve had some big fights.” She says observers have told her “you fight like brother and sister rather than buyer and service provider.” But Henley says the fights are to create “an absolutely incredible system.”

She adds, “They know we won’t take offense if they tell us we are crazy, and we’re free to tell them they are.”

Communication is important. “Things don’t get better with silence,” says Doherty. The two also respect each other. “We can laugh and be friends and still expect each other to perform,” he adds.

Henley says the relationship has to be two-sided. “We know we have to adhere to the same rules they do,” she adds.

ACS’ Government Solutions headquarters is just outside Washington, D.C. Henley appreciates the fact “they make trips here and not just when there are problems.”

ACS also is “happy to tell me” about the latest technology. “This is a big deal for me,” she says.

Doherty adds that the cultures of the two organizations match. ACS’s CEO Lynn Blodgett published a book of his photography about homeless people. “Human services are at the heart of our organization,” he says.

Adding scope

Henley wanted to automate the respite program. Previously the OKDHS gave caretakers six blank checks to pay people to take care of their incapacitated loved ones so they can have a break. She sent an e-mail to ACS telling them how the program currently works, the state’s payment policies, and the number of claims.

ACS engineers sat in her office and “we hashed it out.” The process took weeks. The two then produced a statement of work (SOW). Together they will produce the first system of its kind in the nation, according to Henley.

In January 2009 the OKDHS added distribution of the state’s sales tax refund via an electronic payment card. This enabled 84,000 Oklahomans to receive their funds quicker than traditional checks. Meanwhile, the state saved money associated with postage and printing.

Currently the Department is looking into adding three new programs to the SOW. “We add scope as we find areas that are better suited to their business than ours,” says Henley.

Lessons from the Outsourcing Journal:

• Buyers have to work closely with service providers when designing new systems. If they don’t get involved, the systems may not work.
• A good service provider will go the extra mile to fix a problem, even if it means buying another company!
• Buyers appreciate open, honest communication, especially when a service provider cannot do what the buyer asks.

Debra Floyd, COO, Outsourcing Center; Peter Bendor-Samuel, CEO, Everest Group; Lynn Willenbring, CIO, City of Minneapolis; Anthony Doye, President Global Outsourcing, Unisys Corporation

Building a strong foundation for a new relationship is crucial for its future success. That’s certainly true for the City of Minneapolis and Unisys, who won the Best First Steps Outsourcing Excellence Award in 2004. The young relationship’s goal was to make IT valuable to the city’s agencies and voters. Five years later this duo has captured the best in show award because it has done what it set out to do in 2003 … and more.

The city’s original IT challenges

The City of Minneapolis wanted to outsource its IT infrastructure, which eventually included management of its security cameras and 911 applications; everything was past end of life. The city also needed to build a tier-3 data center.

“Annual budget shortfalls were a problem,” says Jeff Wilke, Unisys’s program director. “The city departments didn’t see why they should spend money refreshing computers when they could use the money to hire more staff,” he says. “It was a tug between the old school and the new school.”

The city did not have the staff to both keep up with the daily operational break/fix work and work on new technology solutions that would add the business value the citizens wanted. “Routine infrastructure management, remedial maintenance, and network management tasks diverted the department from its core mission of providing information services and planning for better use of e-government systems for all users,” recalls Lynn Willenbring, CIO. In fact, 60 percent of the city’s IT budget was devoted to keeping the infrastructure alive.

Yet the IT department wasn’t doing a great job; the network “had a lot of outages,” recalls Willenbring. The city had also started a migration to Windows 2000 to upgrade both its Microsoft Office suite as well as its operating system. “We were struggling and had made little progress. Outsourcing allowed us to turn it all over to Unisys.”

Attracting talent was another issue. The city could not compete in the marketplace for top technology talent because of government wage restrictions. Finances also meant the city could not cost-effectively staff a 24/7 help desk.

“They wanted to move a city of the past to a virtual city of the future,” says Jim Collins, managing director of client management for Unisys and the Minneapolis program director from inception through 2007. “But they didn’t have the money or the energy to tackle the things on their radar screen.”

Supplier selection

Only a limited number of suppliers responded to the city’s original RFP because the city council required the supplier to hire up to 20 of its staff and locate the data center in Minnesota. “Those requirements reduced the number of finalists to two suppliers that could provide the service,” says Willenbring.

To decide between the two, the city looked at depth of experience and their ability to deliver. Another factor was the comprehensiveness of the service offerings “because we needed an end-to-end outsourcing,” continues Willenbring. “And of course price,” she adds.

The CIO says at the outset cultural fit was “a huge issue” because some city staffers as well as some elected officials “were not happy about outsourcing. They believed this is something the city should keep in house.” She felt it was important for the supplier to enter the situation with its eyes wide open, given “the sensitivity it was walking into.”

Willenbring adds, “flexibility was important because we knew that our culture would not tolerate a provider that was rigid. We needed somebody that would not make us jump through process hoops that had no value-add just because it made everybody else jump through those hoops.”

She says the city selected Unisys because it offered “a tightly integrated IT solution that transcended business units and offered a one-stop strategic partnership.”

Transition

Willenbring divides the relationship into two distinct transition periods. In 2003 she says the primary challenges were tactical. The partners transitioned everything, including the staff, in 12 months. “Moving the city’s data center to Unisys’s data center required professional management and seamless collaboration. There was also cultural acclimation between our two organizations,” she recalls.

The first unanticipated challenge was the huge variety in end-user and server hardware. “There was a lack of standardization, which was quite a surprise for Unisys. We ourselves didn’t realize just how big the issue was until we started the transition,” she says.

The most recent transition followed the expansion of the contract in December 2007. The new contract was “more strategic.” The partners also wanted to add current industry best practices to the governance piece. “We increased the service level agreements (SLAs) significantly, adding 28, to make sure we monitor the important items: outcomes and results,” says the CIO.

Second, the city wanted “greater transparency around costs and the flexibility to have some control over them.” Willenbring says the original contract had fixed pricing; now the city pays for usage per month.

Today Unisys has 215 servers and 336 network devices servicing the city; it manages 3,650 desktop devices and 1,100 printers. It averages 1,600 service help desk calls and 4,400 e-mails per month.

Going the extra mile

Fortunately the two partners had already steeled their working relationship when tragedy struck: the I-35W bridge in Minneapolis collapsed on August 1, 2007. “That night we activated our emergency operations center (EOC),” says Willenbring. “We were at the EOC in six minutes,” adds Wilke.

She recalls working at the EOC in the basement of city hall coordinating rescue efforts with the police and fire departments when she got a call from the Unisys program executive. The data center reported its ISP was nearing capacity because so many people sought information on the city’s Web site. Unisys immediately added the extra bandwidth needed “because the world was watching,” says Collins.

“I never would have thought of our Web site that night. Unisys was observing things more closely than normal. It was nice knowing I had a partner watching out for me as well as one that provided the additional services we needed,” she says.

The command center at the bridge collapse site was in a tent. Willenbring says Unisys’s desk-side techs were “down there 24/7. They made sure somebody was always there to deal with any IT issue the fire or police chiefs had. There was no ‘Well, it’s not in our contract’ or ‘This is going to be a time-and-materials charge.’ Nothing like that. It was just ‘This is what we do because we’re partners,’” she says.

The city applied the lessons it learned from the bridge collapse to ensure the success of the Republican National Convention. “We modified our EOC and brought in a huge amount of technology,” she says. It set up a joint command center for the police, which included the Secret Service and FBI. “This was a huge, huge technology project to get all that in place in the preceding months,” she says.

But Unisys was there for the small things, too. Willenbring remembers when she needed to hire another person for computer-aided dispatch (CAD) support but didn’t have the financial resources to do so. She went to Unisys and asked if there were a way to save some money on this CAD contract. She wondered if Unisys could cut the support 50 percent and still maintain the SLAs.

Unisys said no but asked what she was trying to achieve. “We saw her list of cuts and added our own,” says Wilke. “They understood our need,” adds the CIO.

Results

“When this relationship started, we said, ‘Go forth and take care of this mess.’ They were able to do that, which was huge,” reports the CIO.

Taking care of the mess enabled the city to focus on strategic initiatives like the deployment of a wireless network that covers all 59 square miles of Minneapolis providing residents, businesses, and visitors with broadband access. The partners worked to ensure the new wi-fi network supported seamless connectivity to the existing infrastructure. The network “makes our city operations run more efficiently. For instance, building inspectors can file reports and access data in the field and firefighters can view floor plans on the way to a fire,” says the CIO. She adds the wireless network was crucial to the city’s response after the bridge collapse.

Unisys initiated a new 911 application for police and fire. “Now dispatchers know where every police and fire vehicle is located and the quickest route to the incident,” explains Wilke. “That means residents get the emergency help they need sooner.”

Customer satisfaction increased, according to an outside consultant the city hired to perform an objective review. The IT department’s average service delivery improved 32 percent. Desktop support enjoyed a 55 percent improvement and disaster recovery had a 114 percent improvement. (Not surprising since the city had no disaster recovery before outsourcing.)

Willenbring says the city saved $18.2 million in direct-cost avoidance over seven years. What did the city do with the savings? It hired more police officers and invested in technology to support public safety. In addition, the city now has an extensive public safety camera system thanks to these savings.

Unisys is helping the city with its green efforts. Wilke says the supplier is leveraging innovative technology with installed chips in PCs so the city can remotely turn them on and off.

IT has improved the lives of the citizens. “Our safety camera system has contributed to a 32 percent reduction in robberies and a 34 percent decrease in car thefts. It also allowed the city to avoid $6 million in settlement costs,” Willenbring continues.

Why this relationship works

Willenbring says from the first day Unisys approached the relationship in a spirit of partnership. “Some suppliers say ‘This is how we do it; sign here or else.’ And the city’s boilerplate contract language is problematic for some larger suppliers. Rather than walking away, Unisys said, ‘This is a problem for us, so let’s talk about how we can figure out a solution instead of drawing an arbitrary line in the sand.’”

The partners built continuous improvement into the service levels. “If Unisys finds efficiencies, we get some of the benefit of those savings,” says Willenbring.

She points out the relationship’s new performance-based metrics clearly helped the supplier, too. “The more they perform, the more business they get from us,” she explains. For example, the initial contract was $8 million a year. The city added $9 million worth of business because “Unisys proved it could provide the service well. That’s a huge performance incentive for them,” she explains.

Willenbring believes Unisys recognizes this relationship “helps Unisys make its service offerings the best they can be and therefore more attractive to other clients. I think that’s helped strengthen the partnership.”

Adds Wilke, “We realized we are a full-fledged part of the city’s management team. We feel pride when we see a fire truck race to the scene because we know we are part of that process.”

Here’s why she believes this relationship deserved the Best Partnership Award: “Before we outsourced, we were so focused on just keeping everything running that we couldn’t really focus on what the city needed to move forward. Since we outsourced, it freed up my department’s time to focus on the strategic value of technology. We’ve been able to launch some huge initiatives that we never would have been able to undertake before, such as our border-to-border wireless network.”

Lessons from the Outsourcing Journal:

• Technology can improve safety and the quality of life in a community. Suppliers become deeply involved in these types of outsourcing relationships because they see the palpable results and take pride in their work.
• Investing in futuristic IT infrastructure helps cities deal with unexpected disasters. Having an outsourcing supplier there to help contributes to a successful intervention.
• Second-generation outsourcing contracts often attack strategic projects after the first generation tackled the tactical issues.

Criteria for the Best Partnership Award: The relationship must qualify for at least three of the other Awards categories. It can have won an award in another category in previous years. Both parties adopted a partnering approach at the outset and continually operate from this approach. They communicate openly, honestly, and proactively.